[bsa_pro_ad_space id=1 link=same] [bsa_pro_ad_space id=2]

Skip to Content

Operator News

Australia – The Star agrees new flat rate tax deal as Sydney partially reopens

By - 1 June 2020

Australian casino giant Star Entertainment and the NSW Government have reached agreement on gaming taxes applicable to The Star Sydney until the end of FY2041.

The current gaming tax arrangements will apply in FY2021. New 20-year arrangements commence in FY2022 comprising flat rates of tax as a percentage of revenue. The International VIP Rebate business and the domestic rebate business gaming tax remains unchanged at 10 per cent of revenue. The Star has also reached agreement with the NSW Government on key issues which provide regulatory certainty, including an agreement to preserve The Star Sydney as the exclusive casino provider of electronic gaming machines (EGMs) in the two casino Sydney market.

The current gaming tax arrangements have been extended and will apply to The Star Sydney in FY2021. For domestic gaming revenues (excluding domestic rebate) up to $780m, a 27.5 per cent tax rate (including GST and Responsible Gaming Levy (RGL)) will apply. For revenues above $780m increasing rates of marginal tax will apply. The attachment sets out further details of domestic gaming tax rates applicable at different revenue levels for FY2021. In the twelve months to December 2019, The Star Sydney recorded domestic non-rebate gaming revenues of $991m, resulting in domestic non-rebate gaming tax of $312 million (31.5% average
tax rate including GST and RGL).

The Star Sydney has been closed since Monday 23 March 2020 as a result of government directives regarding the closure of non-essential businesses as a response to COVID-19. The Star Sydney’s FY2021 domestic gaming tax payments will be affected by several factors, including conditions of reopening and broader macro-economic conditions.

The Star Sydney will continue to be the exclusive casino provider of EGMs under the current casino licencing arrangements in the Sydney market. The Star will be entitled to financial compensation from the NSW Government should EGMs be installed at Crown Sydney at any time until 30 June 2041.

The Star will be entitled to financial compensation from the NSW Government if there are material changes to key regulatory arrangements applicable to The Star Sydney until 30 June 2041. Whilst there are certain stated exceptions, the main triggers for compensation include changes to key existing operating conditions which include the permitted number of gaming units (no caps on tables and multi-terminal gaming machines, 1,500 cap on EGMs), operating hours (24 hours / 7 days a week) and limits on jackpots and prizes (uncapped).

The news came as The Star Sydney re-opened its private gaming rooms and up to 12 food and beverage venues within the casino areas of the complex from 4pm on Monday 1 June 2020. This initial reopening will be limited to up to 500 loyalty club members on an invitation-only basis. Additional visitation will be permitted across other areas of The Star Sydney, including The Darling and The Star Grand hotels, signature fine dining restaurants with up to 50 seated customers, other food venues and
retail.

The re-opening is based on a COVID-Safe Plan (Plan) which incorporates COVID-safe measures into The Star’s existing comprehensive work health and safety procedures. The Plan includes social and spatial distancing measures, hygiene and cleaning measures across the property. The Plan has been developed and endorsed by two independent health experts, and complies with NSW Government health orders.

Managing Director and Chief Executive Officer Matt Bekier said: “The health and wellbeing of our customers and staff is paramount. This first step in the re-opening enables us to welcome back a material number of employees and to re-engage with our guests in a safe environment. The restrictions mean that business volumes will be significantly below normal levels. We are focused on conservatively managing the business to provide us with the confidence for the next stage of returning our properties to more normal conditions as restrictions unwind.”

“We note also the new public health direction made by the Queensland Chief Health Officer yesterday, which provides for some incremental increases in customer capacity in food and beverage venues in Queensland.”

Share via
Copy link